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antoniya [11.8K]
3 years ago
6

XYZ Company is in the process of issuing bonds. The bonds have a stated interest rate of 4%, which is 2% below the current marke

t rate. What effect will the two interest rates have on the bond issue price?
A. The issue price will be above the bond's face value.
B. The issue price will equal the bond's face value.
C. The issue price will be below the bond's face value.
Business
1 answer:
dem82 [27]3 years ago
6 0

Answer:

C. The issue price will be below the bond's face value

Explanation:

Issuing new bonds with a stated interest rate of 2% below the market rate means that the issuing company will pay investors(bondholders) a coupon amount that is less than what the market is currently offering. Due to this reason, investors will not be willing to pay a higher price to receive lower coupon payments for the life of the bond. Therefore, the issuing price will  be below the bond's face value.

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William Brown, the CFO of Oriole Automotive, Inc., is putting together this year's financial statements. He has gathered the fol
kicyunya [14]

Answer:

$169,521

Explanation:

The computation of long-term debt is shown below:-

Total asset = Cash + Inventory + Goodwill + Net plant and equipment + Receivables + Current assets

= $23,015 + $213,100 + $78,656 + $710,100 + $141,258 + $11,223

= $1,177,352

Long-term debt = Total asset - Account payable - Common stock - Retained earnings - Short term notes

= $1,177,352 - $163,257 - $311,300 - $512,159 - $21,115

= $169,521

Hence, we have applied the above formula for determining the long term debt.

6 0
3 years ago
The town of Millbridge has just agreed to pay a pension for the town clerk. The pension will be $40,000 per year for the next 20
Mekhanik [1.2K]

The amount that must be put aside now is $458,796.85.

<h3>How much should be put aside now?</h3>

The first step is to determine the future value of the annuity:

Future value = yearly payment x annuity factor

Annuity factor = {[(1+r)^n] - 1} / r

Where:

  • r = interest rate = 6%
  • n = number of years = 20

$40,000 x [(1.06^20) - 1] / 0.06 = $1,471,423.65

Now, determine the present value of this amount:  $1,471,423.65 / (1.06^20) =$458,796.85

To learn more about present value, please check: brainly.com/question/26537392

4 0
1 year ago
Why would a smart person keep at least $100 balance in their checking account at all times
aliya0001 [1]

One of the major reasons to keep at least $100 in your checking account is to actually cover for unexpected expenses, and also to avoid bank charges or fees for either an overdraft or a returned unpaid transactions.

It could also come handy if you get stuck somewhere, or if you need to take a taxi after having dinner with your new date, and your debit/credit card is on $0.00, this could save you the ultimate embarrassment by just transfering money from checking to your savings account.

4 0
3 years ago
Stephen decided to rent an suv for the family trip he was planning. on the way back from his trip, the suv got stolen. unless st
svet-max [94.6K]

Answer: a loss damage waiver

Explanation: apex

4 0
3 years ago
Read 2 more answers
Which of the following describes a system of reporting revenues and expenses in the period in which they are considered to have
saul85 [17]

Answer:

c)accrual basis accounting

Explanation:

Accruals basis accounting (accruals accounting, the matching concept) depicts the effects of transactions and other events and circumstances on a reporting entity’s economic resources and claims in the periods in which those effects occur, even if the resulting cash receipts or payments occur in a different period.

In accrual basis accounting:

Revenue from sales and other income should be reported in the period when the income arises (which might not be the same as the period when the cash is received from the customer / client).

The cost of sales in the statement of comprehensive income must be matched with the sales. Income and ‘matching’ expenses must be reported in the same financial period. In other words, when the revenue is recognised from sale then the cost must also be recognised in the similar accounting period.

Other expenses should be charged in the period to which they relate, not the period in which they are paid for.

So based on the above discussion, the answer is c)accrual basis accounting

4 0
2 years ago
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